Wednesday Morning Coffee: Pension Reform (Take Two).

Good Wednesday Morning, Fellow Seekers. Now we're hardly the type of blog who'd gratuitously start a class or generational war, but, man, do the Baby Boomers have a lot to answer for.

Not only did they foist horrible Nora Ephron-penned romantic comedies on an unsuspecting world, they're also responsible for the turgid pop stylings of Seals & Crofts. And don't even get us started on the whole tie-dye thing.

But among their cardinal sins is the fact that, because there's so darn many of them, the sheer weight of the eventual pension obligation is heavier than a night of listening to Dylan Thomas poetry without any pharmaceutical assistance while The Velvet Underground plays in the background.

So it's nice to see some of their number -- and, yes, we're looking at you Senate Majority Leader Dominic Pileggi and Senate Majority Whip Pat Browne -- ponying up with a bill intended to reform Pennsylvania's public pension system.Appropriations Committee Chairman Jake Corman, R-Centre, is also on board. But he's at the far end of GenX, so we're giving him a pass on the sins of the Baby Boom generation.

The three Republicans' plan would move all state employees hired after Dec. 1 of this year into a new pension plan that would operate more like a 401(k) plan (from the Latin for "Cross Your Fingers and Pray) instead of the existing defined-benefit system, the PAIndependent reports this morning. The latter, in case you're unfamiliar, provides pension benefits based on a formula of years worked, highest salary and a multiplier based on position. There may also be a dartboard of some kind involved, but don't hold us to that.

"Over the past few decades, virtually all of the private sector has shifted to defined-contribution retirement plans," Pileggi said in a statement."It's time for Pennsylvania government to do the same."

Pennsylvania will pay about $1.7 billion in pension benefits in 2012-13. The tally will hit $4 billion by fiscal 2016.

Good start ... now let's talk about some of those Paul McCartney solo records. The rest of today's news starts after the jump.

Auditor General Jack Wagner ... ... is giving big ups to the Department of Public Welfarefor uncovering nearly $1 million in fraud by out-of-state residents who are using state-issued electronic benefit cards, the Tribune-Review reports this morning.Wagner tells the newspaper that his audit of one month in 2011 found more than $5 million in out-of-state fraud. The reason for the difference: Wagner looked at border states, while DPW looked at non-border states. Neighboring states are slated for review next, the Trib reported.

When It Comes To ... ...wringing tax money out of its gambling halls, Pennsylvania is unmatched, bringing in nearly $1.5 billion in taxes from 10 casinos during 2011. That's more money than Nevada, New Jersey and Delaware brought in combined, our Mothership colleague Matt Assad reports, citing the latest numbers released by the Pennsylvania Gaming Control Board and the American Gaming Association. "Pennsylvania leads and it's not even close," said Richard McGarvey, spokesman for the Pennsylvania Gaming Control Board. "That's what happens when you have a 56 percent tax rate in a state this big." A 56 percent tax rate -- and the casinos don't even blink. Nor did they flee ... Hmmmm ...

So Remember That Statewide Radio System ... ... that was supposed to be a godsend for emergency service workers everywhere? The Pennsylvania State Police no longer trust it to work, so the agency is sinking $11.5 million into a new backup system, the Patriot-News reports.

There's A Succession Battle Brewing ... ... in the Bucks County GOP over who's going to replace longtime county Chairman Harry Fawkes, the Bucks County Courier Times reports. Current vice-chairwoman Pat Poprik and failed U.S. Senate candidate David Christian are both vying to replace Fawkes, who's led the party for four decades, the newspaper reports.

Where In The World Is Tom Corbett? If you're a longtime reader of the blog, then you probably remember the old EdWatch feature, in which we tracked the daily movements of Pennsylvania's chief executive. Welcome to "Where in the World is Tom Corbett?" in which we'll do the same for the new(ish) guy. The Guv travels to Norristown today for an 11 a.m. bill-signing with Rep. Mike Vereb, R-Montgomery.

What Goes On (Nakedly Political Edition). Republican state treasurer candidate Diana Irey Vaughan holds a 5:30 p.m. reception at the Duquesne Club in Pittsburgh. Admission runs $500 to $5,000. A group called Women for Sen. Vince Hughes holds a 5:30 p.m. reception at the Joan Shepp Boutique on Walnut Street in Philly tonight. Admission runs $100 to $2,500. The evening's special guest is actress/singer/Mrs. Hughes Sheryl Lee Ralph.

You Say It's Your Birthday Dept. Best wishes go out this morning to reader Jared Walczak, now of scenic Harrisonburg, Va. Congratulations.

On The Capitol Ideas iPod This Morning. Here's a tune that fairly spills sunshine all over you. It's "I Wanna Go," by the appropriately named Summer Heart. We can see this one playing after a long day at the beach.

Wednesday's Gratuitous Baseball Link. One of these days, the Yankees will figure out what it takes to beat the Los Anageleheim Angels. Last night was not that night. The Bombers dropped a 5-1 decision, extending their losing streak to two games (which is nearly 50 percent of the 5-game winning streak they had coming into the series). The two teams meet again tonight.

OK. That's it for now. See you all back here in a bit as news and events warrant.

Current Comments

re: pensions. See NY Times article from April 2012.
Comparative performance of pension assets according to different strategies. Bottom line: Pa pensions several billion poorer because they overpaid for underperformance relative to other strategies.
Ironic that we celebrate nabbing a couple hundred welfare cheats who may cost the state a million dollars while we ignore a score of money managers who walked off with seven hundred million for poor performance.

Posted By: arby | May 31, 2012 7:27:27 AM

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